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Sunday, September 22, 2013

Microsoft invites trade-ins for Windows phones, Surface

Microsoft has expanded a buyback program intended to boost sales of Windows smartphones and tablets, and will pay up to $350 for a wide variety of rival hardware powered by Apple's iOS and Google's Android.
Stephen Baker, an analyst at the NPD Group who specializes in retail,
applauded the deal. "This is clearly a marketing ploy, [but] they
usually prove to be good programs for getting people into stores," Baker
said.

The new program followed an earlier, more limited buyback deal that dealt only in Apple iPads. Customers can trade in a used iPad for a minimum of $200, with the funds placed on a gift card good for purchases at Microsoft's own retail stores.

Microsoft's expanded buyback accepts numerous rival devices, including
smartphones and tablets running Android made by the likes of Samsung,
Lenovo and others; Apple iPhones and iPads; and even BlackBerry
smartphones.

How it works

Customers receive quotes online from Clover Wireless—one of the many
"re-commerce" companies bidding for used hardware that they then
refurbish and resell, mainly in developing markets outside the U.S.—and
then ship their hardware along with proof of purchase of a Windows phone
or tablet. Assuming everything's approved, Clover returns a prepaid
Visa card loaded with the payment amount.

The caveat: Customers must first buy a Windows smartphone or tablet.
"The Microsoft device must have been purchased within thirty days of the date you ship your old device," the program's FAQ
states. The new purchase does not have to be a Surface RT or Surface RT
tablet, but can be a third-party Windows-based phone from Nokia, HTC,
Huawei, and Samsung; or a tablet made by Acer, Asus, Dell, Lenovo,
Microsoft, Samsung, Sony, and Toshiba.

Clover Wireless' quotes for used hardware were in line with those
generated by other cash-back rivals. Clover quoted $75 for a used 16GB
iPhone 4 running on Verizon's network, while Gazelle and NextWorth—two
popular buyback vendors—offered $75 and $65 for the same device on
Thursday.

Clever lure or desperation?

Some critics panned the expanded program—and earlier, the
original—saying that Microsoft was essentially paying for new customers,
or trying to.

"Of course they are," Baker retorted. "That's the whole point of
marketing and advertising. Whether it's rebates or buybacks or lower
prices or advertising, companies pay for new customers. That's how
things work."
Nor are Microsoft's buyback programs a mark of desperation, an
easy-to-conclude analysis because the Redmond, Washington company has
struggled to sell its Surface tablets since their introduction last
October.

"Anyone who says that knows nothing about consumer marketing, knows
nothing about how to drive traffic into stores," said Baker, rejecting
the desperation thesis. "These are smart moves, not stupid moves. If
you're not doing something to drive traffic, that's a stupid move.

Buyback and trade-in programs are generally effective, Baker added, as
long as the retailer doesn't use the tactic too often. "People are not
always thinking of these opportunities, but they lose their
effectiveness if you go to that well too often," said Baker.

While Microsoft's iPad buyback deal has an expiration date of October
27, the expanded program run in conjunction with Clover Wireless has no
apparent end date.

Microsoft's website contains more information about the buyback program and links to start the quote process.

Microsoft broadened its rival hardware buyback program and will accept
trades of Android and iOS smartphones and tablets when customers buy a
Windows phone or tablet.
(Image: Microsoft.)